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Code No.V3101/R07 III B.Tech I Semester Regular Examinations November, 2010 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS (Common for CE, ME, ECE, ECC, ICE & BOT) Time: 3 hours Max.Marks: 80 Answer any FIVE questions All questions carry equal marks Note: Present Value Tables are permitted for the Q.No:7 ***** 1. What is meant by Elasticity of demand? How do you measure it? 2. (a) Discuss the Law of Demand. (b)What are its exceptions? Explain. 3. (a) Compare and contrast between perfect competition and monopoly (b) Illustrate the price determination in case of monopoly. 4. Explain the production function with reference to Law of Variable proportions and substitutability of factors. 5. (a) What is sole proprietorship form of business organization? (b) Explain its features, advantages and disadvantages. 6. If sales are 10,000 units and selling price is Rs. 20 per unit, variable cost Rs. 10 per unit and fixed cost is Rs. 80,000. Find out BEP in units and sales revenue. What is profit earned? What should be the sales for earning a profit of Rs. 60,000/-. 7. ABC Co. ltd. is proposing to mechanize their operations. Two proposals A and B in the form of quotations have been received from two different vendors. The proposal in each case cost Rs. 5, 00,000/-. A discount factor of 12% is used to compare the proposals. Cash flows after taxes are likely to be as under.

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Which one do you recommend under Pay back period and Net Present Value Index methods? 8. (a) What are the important ratios? (b) Explain any four of them with examples to understand the financial statements?

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MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS (Common for CE, ME, ECE, ECC, ICE & BOT) Time: 3 hours Max.Marks: 80 Answer any FIVE questions All questions carry equal marks Note: Present Value Tables are permitted for the Q.No:7 ***** 1 (a) Define Managerial Economics. (b) Explain the nature and scope of Managerial Economics 2 (a) Discuss the Law of Demand. (b)What are its Exceptions? Explain. 3 (a) What is perfect competition? (b) Explain the equilibrium of firm and industry in both the short-run and long- run under perfect competition. 4 (a) Distinguish between returns to factors and returns to scale (b) Explain laws of returns 5 (a) Define partnership. Explain its features and limitations (b) Differentiate between Sole trader and Partnership 6. Consider the case of the company with the following two investment alternatives each costing Rs. 9, 00,000/-. The details of the cash flows are as follows. Year 1 2 3 Cash flows (in Rs.) Project-I Project-II 3,00,000 6,00,000 5,00,000 4,00,000 6,00,000 3,00,000

The cost of capital is 10 per cent per year. Which one will you choose? (a) Under DCF method. (b) Under NPVI method. 7. XYZ Company has supplied you the following information. No. of units sold 20,000 units Fixed cost Rs. 2, 40, 000 Variable cost per unit Rs. 15

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Code No.V3101 /R07

Set No.3

III B.Tech I Semester Regular Examinations November, 2010 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS (Common for CE, ME, ECE, ECC, ICE & BOT) Time: 3 hours Max.Marks: 80 Answer any FIVE questions All questions carry equal marks Note: Present Value Tables are permitted for the Q.No:6 ***** 1. What is demand analysis? Explain the different factors that influence the demand for a product 2. (a) What is Law of demand? (b) Explain its limitations and why the demand curve is slopping downwards? 3. (a) Define Monopolistic competition. (b) How are the price and output determined under Monopolistic competition? 4. (a) What is break-even point? Explain it through the break-even chart. b) from the following data calculate the break-even point : Fixed cost ----- Rs. 9,000 Selling price ----Rs. 5 per unit Variable cost ---Rs. 3 per unit Suppose the price reduces to Rs. 2 per unit, what would you say about the break-even position? 5 (a) Define public enterprises. (b) What are the features and advantages of public enterprises?

6. ABC company is considering the purchase of a machine from the following: : Machine-I Machine-II Life 3 years 3 years Initial Investment Rs. 10,000 Rs. 10,000 Net Earnings after tax Rs. Rs. 1st Year 8,000 2,000 6,000 7,000 2nd Year 3rd Year 4,000 10,000

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MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS (Common for CE, ME, ECE, ECC, ICE & BOT) Time: 3 hours Max.Marks: 80 Answer any FIVE questions All questions carry equal marks Note: Present Value Tables are permitted for the Q.No:7 ***** 1. Explain how Managerial Economics is linked with other academic disciplines. 2. (a) What is Elasticity of Demand? (b) How do you measure it? 2. (a) Define Monopoly. (b) Illustrate the price determination in case of Monopoly. 4. (a) What is meant by internal and external economies of scale (b) Discuss various types of internal economies available to a firm 5. (a) What do you understand by Joint Stock Company? (b) Explain its features and various forms. 6. If sales are 10,000 units and selling price is Rs. 20 per unit, variable cost Rs. 10 per unit and fixed cost is Rs. 80,000. Find out BEP in units and sales revenue. What is profit earned? What should be the sales for earning a profit of Rs. 60,000/-.

7. ABC Co. Ltd. is proposing to mechanize their operations. Two proposals A and B in the form of quotations have been received from two different vendors. The Proposal in each case costs Rs. 5, 00,000/-. A discount factor of 12% is used to compare the proposals. Cash flows after taxes (CFAT) are likely to be as under.

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